Are Direct Sales Companies a Scam?

I am passionate about helping moms free up their time so that they can focus as much as possible on what matters most. This is why I post easy activities for moms and I spend time researching topics that I know are important to moms, so they don't have to. This is also why I love helping moms earn income from home whether it's through coaching them on running a profitable blog or providing work at home mom tips.

I believe with my whole heart that any mom who wants to work from home can but I also know that weeding through all of the options and, yes, scams can be tiresome. So, once again, I'm doing the research for you. One very common option for working at home is direct sales. However, this industry seems to have a negative implication with many people which makes it hard for a mom to know if this is really something she should explore. 

So, I want to talk about direct sales - what it really is and whether or not it may be a viable work at home option for you

Is Direct Sales a Legit Work At Home Option | Are Direct Sales Companies Pyramid Schemes | What is Multi-Level Marketing | What is a Pyramid Scheme | Is Direct Sales a Scam | How to Find a Work at Home Job | Tips for Starting a Direct Sales Business | Work at Home Mom Jobs | #wahm | #workfromhome | #networkmarketing | #momboss |

I'm sure you've heard of more direct sales companies than you can probably count - Mary Kay, Avon, itWorks, Amway, Jamberry, Usborne Books... just to name a few! But what is exactly is the definition of a direct sales company? 

A direct sales company, is one that takes the products directly to the consumer. (Source

Though we typically think of companies like the ones I mentioned above as direct sales, there are various companies that use a direct sales model. If you work in an office setting you may have experienced someone dropping by to talk to you about your copy machine or office supplies. This is a form of direct sales. 

Many, though not all, direct sales companies have a multi-level marketing (mlm) component to them. And this is where it seems that a lot of controversy and confusion comes in concerning these types of companies. 

Multi-Level Marketing Vs. Pyramid Scheme

You have likely heard someone refer to multi level marketing (or network marketing) as a pyramid scheme. And, if you have any interest in a network marketing business, this is probably a little concerning. As it should be! So, allow me to explain the difference. 

Multi-level marketing is a model used by many direct sales companies to encourage their distributors to recruit new distributors by offering them a commission on their recruits' sales. (Source

A pyramid scheme is when a company's profits are almost entirely from signing up new recruits. (Source

The major difference between multi-level marketing and a pyramid scheme is not just the existence of a product or service but whether or not that product or service produces profit.  

Oh, and also, pyramid schemes are illegal. 

Multi-level marketing companies absolutely can be legitimate (and lucrative). Unfortunately, though, some companies are operating under the guise of a multi-level marketing model when they are actually pyramid schemes. 

The number one way you can tell if a multi-level marketing company is legit is based on whether or not the company profits from sales to consumers.

If you are interested in joining a direct sales business the first thing you should ask the person recruiting you is if she makes money from selling the product. Or, if shes just a recruiting powerhouse, can she give you examples of some others that do? Basically, if you want to determine if it's a legit opportunity, you need to know that profits aren't solely made (or even mostly made) by recruiting.  To be clear, the recruiting factor is not a bad thing but if that is the only way you can earn money then you will want to steer clear. And if you aren't even quite sure what the product or service is.... RUN!! 

For more information on how to tell if a multi-level marketing business is legit, check out these tips from the Federal Trade Commission (FTC). 

Is direct sales (more specifically, network marketing) a viable option for you? 

Now that you know how to spot a scam versus a legitimate direct sales business, you might be wondering if direct sales is a viable option for you. Here are some questions to help you! 

1. Are you a self-starter? 

While some companies and distributors offer amazing training and resources, it is still up to you to make your business happen. If you lack self motivation then direct sales may not be for you. 

2. Are you easily deterred by others' negative opinions? 

No matter how you hard you may try to explain it there are many people that just don't like direct sales and who won't like that you are doing it. If you can't get past this then you will have a hard time building your business. 

3. Are you teachable? 

Many direct sales companies have a system down. And it works. If you are teachable and can follow the plan you have a good chance of being successful! 

4. Do you have a really big "why"? 

Something you will hear a lot in direct sales is talk about your "why". Why do want to run your own business? If your "why" isn't big enough then you will most certainly quit too soon. A popular saying is "your why should make you cry".